group a5 martha isabel andersson erika bulger marianne myrberg behavioural management control me...
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The Best Interest of Axeon: A new factory in England would guarantee the supply of the AR-42 to the costumers in case of plant shut down. Growing potential with a new subsidiary which will reinforce the decentralisation. “Matter of key importance for the morale and autonomy of the subsidiaries”TRANSCRIPT
Group A5Martha Isabel Andersson
Erika BulgerMarianne Myrberg
Behavioural Management ControlME 2028
Initial Analysis: No approach towards the possibility of
producing AR-42 in the Netherlands.
Important to be able to compare the extension production with the production in the new UK factory
The proposal reflects more of a competitive thinking than a corporate overall thinking
The Best Interest of Axeon: A new factory in England would
guarantee the supply of the AR-42 to the costumers in case of plant shut down.
Growing potential with a new subsidiary which will reinforce the decentralisation.
“Matter of key importance for the morale and autonomy of the subsidiaries”
Mr. Van Leuven’s behavior:In our opinion, Mr. van Leuven shows personal limitations and lack of motivation.
He probably felt unsure of taking such a big decision for the company, he does not want to take responsibility for his decisions and bear the consequences if something goes wrong.
Transfer price for AR-42: usual pricing: market- based and no
mandatory selling No market- based pricing in this case; costs will
decrease if the production increases to 1000 tons Production near full capacity
Marginal transfer pricing is possible Negotiation not an option due to the current
situation with many conflicts. Dual rate pricing seems to be best solution for
both sides.
Corporate strategy:
Decentralisation
Subsidiary manager empowerment
Entrepreneurship
Critical success factors: Extensive production line of industrial
chemicals High quality of products Knowledge and expertise; trained
personnel Core competence in production of AR- 42 AR-42 is a unique product
Key recurring activities: Accounting system Sales Transfer pricing Communication and negotiation
Centralisation/ Decentralisation in Axeon: Vision: decentralisation
Results control is implemented Rewarding system based on revenue Subsidiary manager empowerment
Risk of sub-optimization and politicizing In this case:
Centralisation shines through
Mr. van Lueven should: Implement tone at the top Trust in Ian’s capabilities Accept proposal: “ key importance for the
whole company […] because of its implications […] for the autonomy and morale of subsidiary management.